India has welcomed Pakistan's arrest of the longtime leader of an Islamic militant group which New Delhi accuses of organizing an attack on its parliament. But Indian officials say at least two soldiers have died and five others are wounded in border clashes with Pakistani forces.

Indian Foreign Minister Jaswant Singh says Islamabad's reported arrest of the former leader of Lashkar-e-Toiba, Hafiz Mohammed Saeed, and other militants is a step in the right direction.

"We hope that such action against terrorist activities targeting India, including Jammu and Kashmir, would be pursued vigorously until cross border terrorism in our country is completely eliminated," said Foreign Minister Singh.

The foreign minister's comment came after a meeting of India's cabinet committee on security.

Mr. Saeed was arrested Sunday. He resigned as leader of the Lashkar-e-Toiba last week saying the group was moving to Kashmir.

India had dismissed previous measures taken by Pakistan against the Lashkar-e-Toiba and the Jaish-e-Mohammad which allegedly attacked its Parliament as "cosmetic", and demanded that Islamabad take "concrete" measures to shut down the two groups.

Earlier, Pakistan had frozen the accounts of Lashkar-e-Toiba, arrested the leader of the Jaish-e-Mohammad group and detained about 50 other militants. Islamabad said New Delhi must produce evidence for it to take action against other militants.

Mr. Singh says India has provided sufficient evidence to friendly countries about the involvement of the two militant groups in the attack on the Indian parliament, "and it is largely on account of that that Pakistan has now begun to act against Jaish-e-Mohammad and Lashkar-e-Toiba," said the Indian official.

Mr. Singh did not rule out a meeting with his Pakistani counterpart on the sidelines of a regional summit being held in Nepal later this week.

Many countries, including the United States, Britain and France, have been asking India to open a dialogue with Pakistan to ease their growing tensions. But New Delhi officials have said they will only talk to Pakistani authorities after they see some firm action against groups involved in terrorism.

New Delhi is also handing over a list of alleged terrorists and criminals in Pakistan wanted in India.

India has massed tens of thousands of troops along its border with Pakistan since the attack on its parliament. Islamabad has matched that deployment.

There has been sporadic shelling and exchange of gunfire between troops on both sides of the border. Indian officials say the latest cross-border firing has claimed the lives of at least two Indian soldiers.

Thousands of villages in India have evacuated their homes as both countries say they want to solve the crisis peacefully, but are prepared for war.